HC held that the assessee was not entitled to special deduction...

HC held that the assessee was not entitled to special deduction under s.42 for the relevant assessment year. Relying on the Production Sharing Contract (PSC), HC affirmed that tax authorities are bound strictly by the contractual stipulations and cannot rely on external understandings or prior correspondence, as these are superseded by Article 32, which mandates written amendment signed by all parties. Consequently, the AO correctly denied the deduction under s.42. On reopening, HC held that the reassessment was valid, as there had been no prior scrutiny or examination of the s.42 deduction in the original assessment and hence the reopening could not be characterised as a mere change of opinion. In view of this, HC declined to interfere with the reassessment and upheld the Revenue's position.